By Bosse                                              H.B. No. 2685
         77R9120 PAM-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to prohibiting certain attorney's fees from being included
 1-3     in the cost of foreclosure of a property owners' association's lien
 1-4     and establishing a right of redemption in relation to the
 1-5     foreclosure.
 1-6           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-7           SECTION 1. Chapter 202, Property Code, is amended by adding
 1-8     Sections 202.007 and 202.008 to read as follows:
 1-9           Sec. 202.007.  ATTORNEY'S FEES:  FORECLOSURE OF PROPERTY
1-10     OWNERS' ASSOCIATION'S LIEN. (a)  The amount of attorney's fees that
1-11     a property owners' association may include in the indebtedness
1-12     covered by a property owners' association lien is limited to the
1-13     greater of:
1-14                 (1)  one-third of the amount of all actual costs and
1-15     assessments, excluding attorney's fees, plus interest and court
1-16     costs, if those amounts are permitted to be included by law or by
1-17     the restrictive covenants governing the property; or
1-18                 (2)  $1,000.
1-19           (b)  This section does not prevent a property owners'
1-20     association from recovering or collecting attorney's fees in excess
1-21     of the amounts prescribed by Subsection (a) by other means provided
1-22     by law.
1-23           Sec. 202.008.  RIGHT OF REDEMPTION AFTER FORECLOSURE. (a)  A
1-24     person who purchases property at a sale foreclosing a property
 2-1     owners' association lien must commence and prosecute a forcible
 2-2     entry and detainer action under Chapter 24 to recover possession of
 2-3     the property from any previous owner in possession of the property.
 2-4           (b)  The owner of property in a residential subdivision may
 2-5     redeem the property from any purchaser at a sale foreclosing a
 2-6     property owners' association's lien not later than the earlier of:
 2-7                 (1)  the 90th day after the date the owner is served
 2-8     with citation in a forcible entry and detainer action; or
 2-9                 (2)  the second anniversary of the date of the
2-10     foreclosure sale.
2-11           (c)  A person who purchases property at a sale foreclosing a
2-12     property owners' association's lien may not transfer ownership of
2-13     the property to a person other than a redeeming property owner
2-14     during the redemption period.
2-15           (d)  To redeem property purchased at a foreclosure sale, the
2-16     property owner must pay to the purchaser:
2-17                 (1)  the amount the purchaser bid for the property at
2-18     the foreclosure sale;
2-19                 (2)  the amount of the deed recording fee;
2-20                 (3)  the amount paid by the purchaser as taxes,
2-21     penalties, interest, and costs on the property; and
2-22                 (4)  a redemption premium of 25 percent of the
2-23     aggregate total of the amount paid under Subdivisions (1)-(3).
2-24           SECTION 2. (a)  This Act takes effect September 1, 2001.
2-25           (b)  The change in law made by this Act applies only to
2-26     property subject to a sale foreclosing a property owners'
2-27     association's lien that occurs on or after the effective date of
 3-1     this Act.